Prime Minister John Key has sounded the death knell for a proposed tax on employer-provided laptops and cellphones just a day after Cabinet scrapped the tax on perk car parks.

"There is virtually no chance of it going ahead," Key said of the laptop and cellphone tax on his way into Parliament today.

"At the end of the day they are a nice idea when it comes to tax policy and a pain in the neck for everyone who has to put up with it."

He said it was not as it was often painted, because if an employer gave you a phone it was not subject to fringe benefit tax, it was "about money".

"It all gets lost in translation and I don't think it will go ahead."

Revenue Minister Peter Dunne had read the submissions "and he doesn't look very optimistic to me and neither am I".

Key said the Government would weigh up the impact on consumers and taxpayers against the compliance costs.

Dunne said he would answer questions in the House today and did not want to pre-empt his comments there, where it was more appropriate to make them.

Dunne had today conceded the laptop and cellphone tax was potentially even more controversial than the car-park tax.

The Government would look carefully at the reaction - which had been "stronger" than the car-park tax - and look at how it works in practice, he said.

The Employers and Manufacturers Association, which joined with unions to fight the car-park tax, has signalled that was just the start of a longer campaign to overturn the other planned taxes, including the laptop and cellphone tax.

But there is also mounting concern over plans to tax accommodation provided for workers who relocate long-term to help with the Christchurch rebuild.

The IRD has indicated that a employees of a firm based in Auckland who worked fulltime in Christchurch and have their accommodation paid for by their employer would be deemed to have relocated and therefore the market value of that accommodation would be taxable.

Labour revenue spokesman David Cunliffe has described the move as "more akin to the actions of a vulture picking over a carcass for every last morsel than it is to sensible fiscal management".

The ruling seemingly ignores how little remuneration benefit there is to a worker, who must still maintain a family home even though the worker can't use it, he said.

- © Fairfax NZ News

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